New (mobile) world order: carriers still believe…

Being active in mobile for more than 9 years, on carrier, agency and media sides, i keep on getting information about this ecosystem. Mobile is seen as revolutionary lately (I just understood the Mobile Kills Dinosaurs analogy from Yves Kallaert), but seeds have been planted for a long time and DiCoDE can be used to understand the whole story. Reading this article from GSMA’s Steve Costello, i’ve tried mapping main elements on DiCoDE present and it seems to match. Here’s my take:

This week will apparently see executives from Orange, T-Mobile, Telefonica and Vodafone meeting to discuss the incursion of Apple and Google into the mobile industry. When the news was first announced, the concept of a ‘war cabinet meeting’ in France seemed somewhat surprising: the idea of the operators waking up to the fact that Apple and Google are posing more and more of a threat, perhaps less so.

Most galling for the incumbents must be the fact that the new guys have steamed straight into the most lucrative parts of the mobile market, without having to go through the painful process of buying licences, building and operating networks, and supporting subscribers. Look where the big growth areas are and you will find Apple and Google – not always alone, but always present. The booming mobile app market is dominated by Apple, with Google a close second. In mobile advertising, both Apple and Google have made acquisitions to bolster their presence. Smartphones are the area of the handset sector driving growth; iOS and Android is where most of the momentum is coming from.

As i say in DiCoDE present, the mayorship on the Mobile Ecosystem moved from Telecom to User Interface Universe. Telecom locked the whole system, created a Media (walled) Garden, managed the customer relationship on their own, especially through the bill and didn’t consider innovation, especially around browser, device, OS and apps. They also didn’t treat their Media Garden as a real media, failing to set up Mobile Advertising. Lastly, they failed pushing Device Manufacturers to innovate further and binding this innovation to Value Added Services, just like they succeeded initially with Nokia through ringtones, operator logos…

In the markets where Orange, T-Mobile, Telefonica and Vodafone are most active, the handset is perhaps the most logical place to start the fightback. Operators largely control the supply chain, and have the purchasing clout to heavily influence vendors’ product roadmaps. While the mobile internet business has changed to such an extent that a return to the days of the walled garden is inconceivable, the handset does provide a real way for operators to get new products and services into the hands of customers, with the potential to reduce the influence of the interlopers.

It will be difficult for Carriers to succeed on product innovation, especially since they’re competitors on many markets. Their biggest threat is their alliance itself. But Steve Costello is right: innovation must come from the device, from the User Interface universe. Or maybe by locking their key differentiator, just like Apple did. And here, it’s the network…

While Nokia’s smartphone platform of choice is currently seen as something of a spent force by certain parts of the industry, it is still the largest smartphone operating system by shipment volume, and as the recent Nokia World event showed, Nokia is putting a lot of effort into revitalising the platform and wooing developers. With the operators also on-board, this task would become much easier, and everybody involved able to benefit from the scale of a platform supported by the largest handset maker and the largest operators.

Here, we’re talking again about the platform logic. Just like Alexander Osterwalder explains it in his Business Model Generation book (one of my references), Nokia will have to subsidize its platform to one of its audiences (users or complementors) in order to initiate a possible Platform Utility. It’s very late, but Microsoft is up for the challenge… And with Carriers as partners, it seems feasible… And more important, Nokia doesn’t start from zero… Alex also highlights that Carriers gave up on product innovation, outsourced infrastructure management and now focus on customer relationship. Maybe this kind of innovation is a forced step on this road…

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2 Responses to New (mobile) world order: carriers still believe…

  1. Pingback: Learning about TV thanks to my dad |

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